Intuit (INTU) is set to release its fiscal third-quarter earnings after U.S. markets close Wednesday, with investors closely watching for signs that the company's AI-focused strategy can reverse a significant stock decline. The TurboTax and QuickBooks parent has seen its shares tumble 39.4% over the past year, closing at $399.71 on Tuesday, down 0.9%.
The quarter ending April 30 encompasses the peak U.S. tax season, typically Intuit's strongest period. Analysts anticipate earnings of $12.57 per share on revenue of $8.54 billion, compared to $11.65 and $7.75 billion in the same quarter last year. The company's own guidance projects approximately 10% revenue growth and non-GAAP earnings between $12.45 and $12.51 per share.
Intuit's earnings call at 1:30 p.m. Pacific will be a critical test of investor confidence, especially as the stock has lost about 36% year-to-date through May 19. The company faces dual pressures: proving that its core products—TurboTax, QuickBooks, and Credit Karma—can sustain growth while demonstrating that its AI investments will generate returns rather than just increase costs.
Analyst sentiment remains mixed. Rothschild & Co's Omar Sheikh upgraded Intuit to Buy with a $700 price target in March, while Goldman Sachs' Kash Rangan maintained a Neutral rating with a $519 target. TD Cowen kept its Buy rating but lowered its price target to $576 from $633, citing expectations of a 'clean beat-and-raise' quarter after recent weakness. Other firms like Mizuho, RBC Capital, and Oppenheimer also reduced targets but retained positive outlooks.
Intuit has been aggressively pushing AI integration across its product suite. In May, the company introduced updates to Intuit Enterprise Suite, incorporating automation and workforce management features aimed at mid-market businesses. Ashley Still, head of small business and mid-market, said the enhancements provide finance leaders with 'real-time visibility' by consolidating operational, financial, and employee data. Additionally, the launch of QuickBooks Workforce, an AI-native HCM platform, was described by executive David Hahn as the 'biggest change' to Intuit's HCM offering in 25 years.
However, the bear case remains significant. If AI reduces demand for traditional tax or bookkeeping software, or if elevated marketing spending continues to pressure margins, even a strong revenue report may not satisfy investors. Intuit competes with H&R Block in tax preparation and Oracle's NetSuite in business software, adding competitive pressure.
Key metrics to watch include TurboTax unit sales, QuickBooks subscriber growth, and any commentary on AI monetization. The company's third-quarter profit outlook earlier this year fell short of Wall Street expectations due to increased marketing and customer-support costs during tax season.
With shares down nearly 40% over the past year, investors have limited patience for mixed results. A clean beat-and-raise quarter could provide a much-needed catalyst, but any signs of margin pressure or slowing growth could deepen the stock's decline.
